The same way your site is ranked by Google is the exact same way a Link Directory site is ranked. The more people linking to a site the higher it's position can be on Google's search engine. So for example you submit your site to 50 Link Directories and the title of your Link Directory submission is "Vintage Barbie Doll Repair" after those links have been approved and validated by Google then you can watch your site rise in the rankings for that search term "Vintage Barbie Doll Repair", depending on how competitive your competition is, you can go all the way to the top just with this little amount of work. However with Google's Penguin Update, this may or may not be considered Spam. In order for it to not be spam, for starters, you need to change the title on your Submission and keep the changes in heavy rotation.
The first 5 directories can have a title of "Vintage Barbie Doll Repair"
Then Start listing the differences in titles every 5 submissions "Old Barbie Doll Repair" "Vintage Barbie Restoration"; This will teach Google that you are not limited to one search term. Allowing your site the opportunity for people to really find you. Everyone searches and uses the internet in slightly different ways. Don't make it hard for them to find you and don't allow all your hard work to be in vain because Google randomly chose you as a spammer.
When picking the Link Directory you want to link to you consider the age of the site which can be found here
An Active owner will have a much busier site and you can tell by looking at their traffic Ranking here
Some Sites are "stronger" than others making them have a great Google page rank start with them first. here
Using a Site that only has pay options is more than likely a stronger link however you now have a plan of action to do as many as you want with no charge.
Free Link Directories List can be found all over the Web.
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